2026-VIL-79-CESTAT-KOL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise – Rules 4, 8 and 11 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 – Clearance of goods – Determination of value – Demand of differential duty – Appellant is engaged in manufacture of iron ore pellets – With regard to clearances made to its own units for captive consumption, Appellant had paid excise duty on value determined in terms of Rule 8 of the Rules – Department issued show cause notice alleging that Appellant’s clearances to its own units tantamount to sales to a related party, hence, value should be determined in terms of Rule 4 of the Rules – Adjudicating Authority confirmed demand of differential duty – Whether Appellant is correct in following Rule 8 of the Rules for arriving at value in respect of clearances of goods to their own units – HELD – Appellant had cleared goods to its own unit for captive consumption, which had erroneously been presumed, both in show cause notice and impugned order, as clearances to related party. Since clearance is to another unit of same legal entity for captive consumption, same cannot by any stretch of imagination be treated as clearance to related party. Clearances made by Appellant to its own units for captive consumption should be valued in terms of Rule 8 of the Rules and not in terms of Rule 4 of the Rules. Appellant had correctly valued their goods in terms of Rule 8 of the Rules and therefore, demand of central excise duty by adopting Rules 4 and 11 of the Rules is not sustainable. Order under challenge is set aside – Appeal allowed - Revenue neutrality – Whether it is a case of revenue neutrality or not – HELD – Appellant had been clearing goods to their own units for further manufacture. Duty paid by Appellant is available as CENVAT Credit to their own unit which is using these goods for further manufacture and clearing on payment of duty. In these circumstances, it is a revenue neutral situation.
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